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China will not ease grip on property market

BEIJING: China plans to stick to its tight property sector policies and a nationwide rebound in home prices remains unlikely, a senior official at the housing ministry said in remarks published by state media on Sunday.

The comments underscore Beijing’s determination to keep a lid on rising home prices, a source of social discontent, especially in the run-up to a once-a-decade leadership transition this year.

“With more affordable housing projects put into operation and market expectations kept stable, the conditions do not exist for a full-scale rebound in house prices,” said the official.

The comments came amid new concerns that a new round of property inflation was in the offing, with data showing a pick-up in housing sales as well as an increase in property prices following eight consecutive monthly declines.

Latest figures showed that Chinese house prices rose 0.1 percent in August from July, extending a modest price increase into a second straight month.

Revenues from property sales in the country rose for the third month in a row in August from a year earlier, reinforcing signs of a recovery in the sector.But the official played down worries about a rapid revival in the property market, saying the recent price increase was mainly a result of stronger real demand from first-time buyers rather than speculative demand from investors.

Officials have rejected calls to relax restrictions on the property market in order to bolster the economy, on course for its seventh straight quarterly slowdown over the July-September period.

Full-year growth for 2012 is likely to fall to 7.7 percent, the weakest showing since 1999.

“Macroeconomic control over the property market is at a critical point and we are still facing an arduous task to consolidate the effect of property market curbs,” the official said.

The cabinet sent out eight inspection teams in July to ensure that local governments continued to enforce property market restrictions to clamp down on speculation.

Beijing will also expand a trial property tax reform programme to more cities beyond Shanghai and Chongqing and establish a long-term mechanism to “improve macro-policy control” over the property market, the report said, without elaborating.